Stop Focusing on Rebates ... GDR Needs More of Your Attention

I’ve got a question, have you ever caught yourself forgetting what an acronym stands for? Seriously – It happened to me this past weekend. Acronyms are all around us –

RBI if you’re into baseball…GDP if you’re an economist…PBR if you’re into old school light beer…

You get the point. Employee benefits is riddled with acronyms, especially pharmacy benefits. For example, what does GDR mean to you?

I incorporated this question into the latest episode of Wee Dose of Radical Transparency. You can watch the full-length episode here.

OK, if you’re managing your organizations health plan, GDR should not only be on your RADAR, it should be a prime focus. BTW, RADAR is actually acronym. Did you know that? Yep, it stands for ‘radio detection and ranging’.

Back to GDR – Or, generic dispensing rate.

Here’s the issue: You’ve been trained to focus on rebates. Better the rebates, better the deal, right?! No……

What are rebates based on? You got it – brand drugs. More expensive, generally speaking, or less expensive than generics? Yep, you got it again – more expensive. 

So, here’s the real question – Do you know how generic drugs and brand drugs are defined in your PBM contract?

I hope so – Why?! Because for every % of generic dispensing rate increase, you can find up to 2.5% of total cost reduction.

I was reviewing a PBM contract this morning as part of our Kinetiq Health Pharmacy Benefits Consulting team and was reminded about the range I see with generic drug definitions. From the worst kind that don’t even define them.

To those PBMs that require a generic be available in two or more manufacturer – Wait, what? Why would it need to be made available by two or three manufacturers for it to be a generic? Awkward pause … oh, right so it can be labeled as a brand drug.

And, finally, those contracts on the fully transparent end of the spectrum – The contracts that tie a generic drug to a single, independent, public information source such as MNOY codes via MediSpan - generic as soon as a single alternative is FDA approved.

So, there it is GDR … generic dispensing rate in a nutshell. 

If you’d like to get into this level of transparency and want to understand how your PBM contract stacks up, just reach out. We offer a contract health assessment through our Kinetiq Health Pharmacy Benefits Consulting practice.

You can find me at apexbg.com, or give me a call at 317-341-3970.